Chinese Developers Advance on Policy Speculation: Shanghai Mover

By Bloomberg News -
Dec 25, 2012

Chinese real estate developers rose
to the highest in 17 months after the government said it would
support demand from residents seeking bigger homes, prompting
speculation that authorities won’t introduce new property curbs.

The Ministry of Housing and Urban-Rural Development said
today it will support “home improvement demand” next year,
while keeping in place home-purchase limits to restrict
speculation, the official Xinhua News Agency reported. The
comments eased concerns that authorities may ramp up efforts to
control the property market as home prices and sales rebound,
according to CEBM Group, an advisory company.

“People are now thinking that the policy risk may not be
as big as they worried it might be,” Luo Yu, CEBM’s Shanghai-
based analyst, said by phone. “Should housing policy remain
neutral, home sales would continue to rise.”

China’s new home prices rose in the majority of cities the
government tracks in November as property curbs slowed
construction, reducing the supply available for sale, and banks
offered discounts on mortgage rates to first-home buyers. Prices
climbed in 53 of the 70 cities tracked from the previous month,
compared with 35 in October, according to data from the National
Bureau of Statistics. That was the most in 18 months.

Developers are depending on people seeking a bigger second
home to sustain a recovery in sales next year, CEBM’s Luo said.

In its more than two-year effort to rein in prices, China
has implemented measures including raising down-payment and
mortgage requirements for second homes, imposing a property tax
for the first time in Shanghai and Chongqing and introducing
home-purchase restrictions in about 40 cities.